MAKING A GLOBAL MARK

Indian industry has to seize the Make in India moment and take advantage of the opportunities the government is creating through its enabling business and foreign policies to become masters of the world, not just of their home ground

- R.C. Bhargava

Government policies can result in slowing manufacturing and making it non-competitive. They can encourage unethical management practices. This is apparent from the outcome of industrial policies framed after 1950. The abolition of the licence and control system in 1991, along with the creation of conditions to facilitate competition, brought about some positive change. However, it was only after 2014 that the government implemented policies that removed most of the obstacles to competitive manufacturing. The ease of doing business programme, introduction of GST (Goods & Services Tax), trusting the private sector to lead manufacturing growth, fiscal prudence and several other reforms have created a favourable environment for the growth of manufacturing activity. The budget of 2024 carries forward this objective.

While government policies can determine whether manufacturing can flourish or not, they cannot actually result in accelerating manufacturing growth. The pace of growth would always be determined by the actions of companies. Companies where managements are solely committed to the growth of their companies perform much better than companies whose assets and resources are treated as the personal property of the promoter. Siphoning money from the company significantly weakens growth and competitiveness by reducing the capability to make investments in R&D and expansion. Manufacturing growth in India has been adversely affected due to undesirable management practices developed prior to 1991. That largely explains why the contribution of manufacturing to GDP remains under 16 per cent.